Its middle class is thriving, its people are universally liked and its government actually works.

Fifty years ago, this description might have fit the United States. But not now. America’s middle class is shrinking and its global reputation is spotty. Congress, meanwhile, creates more problems than it solves.

So for guidance on how to fix America, why not look north to Canada, where the mood is upbeat and life appears to be getting demonstrably better? The New York Times recently reported the Canadian middle class is now the world’s richest, surpassing the U.S. for the first time. In the 2014 “better life index” recently published by the Organization for Economic Cooperation and Development, Canada outscored the United States in 9 of 11 categories, including education, safety and overall life satisfaction.

The poverty rate is lower in Canada, and every Canadian citizen has government-provided health insurance, which might explain why Canadians enjoy longer life expectancy than Americans and are considerably less obese. As for the government, Canada’s national debt amounts to about $18,000 per person, compared with $55,000 in America.

So what is Canada doing right?

It has a more stable banking system. Canada has virtually never experienced a financial crisis, and there were no bailouts north of the border in 2008 when the U.S. government committed $245 billion to save dozens of U.S. banks. The differences between the two countries are somewhat accidental. In the United States, distrust of a strong central government all the way back in the founders’ days led to a system of state-chartered banks vulnerable to political meddling, and therefore riskier than the big, nationally chartered financial institutions that operate in Canada.

“In the United States, instability was permitted by regulators because it served powerful political interests,” Prof. Charles Calomiris of Columbia University wrote in a 2013 paper for the Federal Reserve Bank of Atlanta. “In Canada, the banking system was not used as a means of channeling subsidized credit to a favored political constituency, so there was no need to tolerate instability.” The legacy of that today is a malleable U.S. banking system that, among other things, was deregulated in the late 1990s at the behest of banks themselves — which contributed to the 2008 collapse.

The financial crisis and the abuses that led to it are still holding back the U.S. economy. Shoddy lending standards were a major cause of the housing bust, which has whacked $3 trillion off the value of Americans’ real-estate assets — even with the year-long recovery in the housing market. That’s a huge loss of wealth that continues to hold back U.S. spending. And it’s just part of a 25-year debt binge Americans are still working off. With far fewer lending excesses, Canada didn’t really have a housing bust or a credit crisis to recover from.

Money doesn’t dominate politics. Canada has much stricter rules governing campaign contributions than those in America, where campaign-finance laws are getting weaker on account of recent Supreme Court rulings striking down limits on spending. Tougher limits in Canada give people and businesses with money to spend less influence over laws and regulations. “Every single one of my voters thinks that is terrific,” says former journalist Chrystia Freeland, now a Canadian member of parliament, representing a district in Toronto. “There is a lot less influence of the really wealthy and single-issue interest groups. A regular person has a much bigger voice.”

Many members of the U.S. Congress report spending half their time, or more, raising money for reelection efforts rather than legislating. Freeland estimates she spends less than 5% of her time doing that. There’s virtually no chance the United States will ever adopt a Canadian-style parliamentary system, but Congress could pass new laws or amend the Constitution in order to limit the corrupting influence of Big Money in politics. Were that to happen, however, it would probably make incumbent politicians more vulnerable to challengers. Maybe next century.

There’s less hostility toward immigrants. Canada, like the United States, has limits on the number of foreigners it allows into the country to work. But the whole issue of immigration is far less politicized, and there’s a broad understanding that skilled foreign workers help the economy. Canada actually recruits immigrants, part of a deliberate effort to attract talented foreigners most likely to contribute to economic growth. In the United States, the quota for skilled immigrants is far below the number U.S. firms would hire if they could get them. Despite appeals from many businesses, Congress is paralyzed on reforms that would let more skilled immigrants in, partly because that issue gets conflated with separate reforms aimed at stemming the flow of unskilled illegals.

Canada has its own problems, needless to say. Its government-run healthcare system draws complaints of long wait times for care and trailing-edge medical technology. Some economists think a housing bubble may be forming, for instance, and trends such as rising income inequality affect Canada just as they do every other industrialized country. Plus, it's cold.

In the Land of Moderation, however, such challenges seem manageable. “We’re less anxious because we didn’t have the financial crisis,” says Freeland, “but Canadians should guard against smugness.” Now there's something you're unlikely to hear an American politician say.

We don’t have much of an issue with our immigrants that get here legally as I assume most of Canada’s are.

I see what you're saying. I was just addressing the kind Canada is getting-- the kind that don't need welfare whether illegal or not. There is still a high use of welfare even among legal immigrants due to low education levels. Asians also arrive with little money, yet still rise to become successful through hard work and saving. ( One reason Krugman claims they're part of the problem--'cause savings are evil) One thing Asians don't have is their own "Race Hustlers" who feed the idea that others, particularly whites, are the ones holding them down. I'm sure such things help Canada.

Oh I wasn’t disagreeing, just putting a little context to the topic posted above. The reason immigration in the United States is Political and less so in Canada most likely doesn’t have as much to do with their policy as it does with their location. It is just a long ass Swim from the Asian Countries to Canada.

Its middle class is thriving, its people are universally liked and its government actually works.

Fifty years ago, this description might have fit the United States. But not now. America’s middle class is shrinking and its global reputation is spotty. Congress, meanwhile, creates more problems than it solves.

So for guidance on how to fix America, why not look north to Canada, where the mood is upbeat and life appears to be getting demonstrably better? The New York Times recently reported the Canadian middle class is now the world’s richest, surpassing the U.S. for the first time. In the 2014 “better life index” recently published by the Organization for Economic Cooperation and Development, Canada outscored the United States in 9 of 11 categories, including education, safety and overall life satisfaction.

The poverty rate is lower in Canada, and every Canadian citizen has government-provided health insurance, which might explain why Canadians enjoy longer life expectancy than Americans and are considerably less obese. As for the government, Canada’s national debt amounts to about $18,000 per person, compared with $55,000 in America.

So what is Canada doing right?

It has a more stable banking system. Canada has virtually never experienced a financial crisis, and there were no bailouts north of the border in 2008 when the U.S. government committed $245 billion to save dozens of U.S. banks. The differences between the two countries are somewhat accidental. In the United States, distrust of a strong central government all the way back in the founders’ days led to a system of state-chartered banks vulnerable to political meddling, and therefore riskier than the big, nationally chartered financial institutions that operate in Canada.

“In the United States, instability was permitted by regulators because it served powerful political interests,” Prof. Charles Calomiris of Columbia University wrote in a 2013 paper for the Federal Reserve Bank of Atlanta. “In Canada, the banking system was not used as a means of channeling subsidized credit to a favored political constituency, so there was no need to tolerate instability.” The legacy of that today is a malleable U.S. banking system that, among other things, was deregulated in the late 1990s at the behest of banks themselves — which contributed to the 2008 collapse.

The financial crisis and the abuses that led to it are still holding back the U.S. economy. Shoddy lending standards were a major cause of the housing bust, which has whacked $3 trillion off the value of Americans’ real-estate assets — even with the year-long recovery in the housing market. That’s a huge loss of wealth that continues to hold back U.S. spending. And it’s just part of a 25-year debt binge Americans are still working off. With far fewer lending excesses, Canada didn’t really have a housing bust or a credit crisis to recover from.

Money doesn’t dominate politics. Canada has much stricter rules governing campaign contributions than those in America, where campaign-finance laws are getting weaker on account of recent Supreme Court rulings striking down limits on spending. Tougher limits in Canada give people and businesses with money to spend less influence over laws and regulations. “Every single one of my voters thinks that is terrific,” says former journalist Chrystia Freeland, now a Canadian member of parliament, representing a district in Toronto. “There is a lot less influence of the really wealthy and single-issue interest groups. A regular person has a much bigger voice.”

Many members of the U.S. Congress report spending half their time, or more, raising money for reelection efforts rather than legislating. Freeland estimates she spends less than 5% of her time doing that. There’s virtually no chance the United States will ever adopt a Canadian-style parliamentary system, but Congress could pass new laws or amend the Constitution in order to limit the corrupting influence of Big Money in politics. Were that to happen, however, it would probably make incumbent politicians more vulnerable to challengers. Maybe next century.

There’s less hostility toward immigrants. Canada, like the United States, has limits on the number of foreigners it allows into the country to work. But the whole issue of immigration is far less politicized, and there’s a broad understanding that skilled foreign workers help the economy. Canada actually recruits immigrants, part of a deliberate effort to attract talented foreigners most likely to contribute to economic growth. In the United States, the quota for skilled immigrants is far below the number U.S. firms would hire if they could get them. Despite appeals from many businesses, Congress is paralyzed on reforms that would let more skilled immigrants in, partly because that issue gets conflated with separate reforms aimed at stemming the flow of unskilled illegals.

Canada has its own problems, needless to say. Its government-run healthcare system draws complaints of long wait times for care and trailing-edge medical technology. Some economists think a housing bubble may be forming, for instance, and trends such as rising income inequality affect Canada just as they do every other industrialized country. Plus, it's cold.

In the Land of Moderation, however, such challenges seem manageable. “We’re less anxious because we didn’t have the financial crisis,” says Freeland, “but Canadians should guard against smugness.” Now there's something you're unlikely to hear an American politician say.

While Canada does seem to be doing well, how about in the US? How come almost all the liberal states are doing terrible financially, and most republican states such as Texas in the mid-west are doing much better than the rest of the country?

While Canada does seem to be doing well, how about in the US? How come almost all the liberal states are doing terrible financially, and most republican states such as Texas in the mid-west are doing much better than the rest of the country?

It's certainly true that Texas is doing well but not all republican states are doing well and not all liberal states are doing poorly.

The state of Kansas is a prime example of a republican state that can't get out of it's own way.

I like that we get to see experimentation among the states. I think the argument that the feds should pull back in a lot of areas rings true. State by state education experimentation would likely lead to better national standards.

It's certainly true that Texas is doing well but not all republican states are doing well and not all liberal states are doing poorly.

The state of Kansas is a prime example of a republican state that can't get out of it's own way.

I like that we get to see experimentation among the states. I think the argument that the feds should pull back in a lot of areas rings true. State by state education experimentation would likely lead to better national standards.

Yet, Texas did horrible in the 80's when oil prices really dropped. That oil is currently high helps Texas quite a lot too.

Canada does not have 'huge natural resources'. Most of their land is uninhabitable.

The US is unusual in that we are an enormous country with very little uninhabitable land; it's our government that's the main reason why we're still in one piece. There are at most two other countries in the world that have that advantage - China and India - and we aren't suffering from overpopulation and undereducation as they are. Canada is roughly in the same category as Russia, Brazil, and (especially, since they're also colonial in origin) Australia, in that they're a medium-sized country in big-country clothes.

Canada does not have 'huge natural resources'. Most of their land is uninhabitable.

The US is unusual in that we are an enormous country with very little uninhabitable land; it's our government that's the main reason why we're still in one piece. There are at most two other countries in the world that have that advantage - China and India - and we aren't suffering from overpopulation and undereducation as they are. Canada is roughly in the same category as Russia, Brazil, and (especially, since they're also colonial in origin) Australia, in that they're a medium-sized country in big-country clothes.

The US doesn't have overpopulation problems because the history of organized state level civilization in the United States is rather short and before the Europeans, sparse in area. Also, the introduction of Old World diseases killed a lot of the native population well before Europeans to an area.

Canada's biggest resource is that it is the number 2 electricity exporter in the world. It is also the number 5 exporter of natural gas, just ahead of the Netherlands but comfortably behind Qatar and Norway, which are considerably smaller. It's not within the top ten of oil exporters, again despite its monstrous size.

Overall, it's the number 13 exporter in the world, between Italy and Spain, exporting about 458 billion dollars per year. It's also the number 11 importer in the world, importing about 471 billion dollars per year - $13 billion more than it exports.

There's a reason so few people live there, and 90% of those who do live within 100 miles of its southern border: it can't generate enough food to feed any more than that. Most of its north is either tundra, permafrost, or ice cap. Of its 18 main natural resources, the only edible one is fish (twelve others are all minerals). A whopping 4.3% of its land is arable. It does, however, have trees. Lots and lots of trees.

They do well with the natural resources, especially in the highly developed south, but Canada's geography is such that it doesn't churn forth 'huge' amounts, especially given their size and first-world status. It's the main limiting factor as to why we won't see a Canadian superpower any time soon.